If you’re one of the many agencies who have set a goal to get paid for the value you create instead of the hours you work, here are 10 questions to help gauge your progress.
Rate each question on a scale of 1 to 10, where 1 equals “strongly disagree” and 10 equals “strongly agree.”
- We have changed our internal dialogue and language away from cost and time toward value and outcomes.
- We understand that our primary job is to be effective, not efficient, and we work to reinforce this concept with our clients as well.
- We now consider a variety of different compensation options instead of just defaulting to the concept of selling our time.
- We have made pricing (not costing) a core competence of the firm.
- We have shifted our attention away from internal measurements (time, labor, staffing plans, etc.) to external measurements (marketing outcomes, business results, shifts in consumer attitudes and behavior, etc.).
- We regularly precede discussions about scope of work with a discussion about scope of value (expected outcomes).
- We have traded the time and energy we used to spend managing time for doing a better job of managing scope.
- We price our services based on a set of factors that transcend cost.
- We learn from our experience in pricing assignments in an effort to do better the next time.
- We apply the same kind of creativity to pricing and compensation as we do to solving our clients’ marketing problems.
Now add up your score and give yourself a grade like you would in school. If you got 90 or above, you earned an A. Below 60 is a failing grade. But don’t let a low score get you down; just use it as motivation to do better in the coming year.
If you need even more motivation, here are a few links that may help:
Value is created outside the agency
The first step to capturing more of the value your create for clients is to understand how, when, and where value is created.
Start billing for what you really sell
Why billing by the hour is a sub-optimal way to get paid.
You give 110% for new business pitches; now devote at least 1% to thinking about how to get paid
Next time you’re engaged in preparing for a new business presentation, devote 30 minutes to the question “If charging for hours wasn’t an option, what are some of the ways we could get paid by this client?”